Bristol Myers Squibb, the global pharmaceutical giant, said on Friday it would acquire Karuna Therapeutics, which makes drugs to treat schizophrenia and Alzheimer's, in an all-cash deal valued at $14 billion as it seeks to strengthen its portfolio of neuroscience drugs.
Bristol Myers said in a statement that it would pay $330 per share in cash, a premium of about 53 percent to Karuna's share price on Thursday.
The increasing prevalence of schizophrenia, driven in part by an aging population, has led to a push to make more drugs to treat it. The market for this type of therapy is estimated to grow to $12.6 billion by 2032, according to the research firm Market.Us. Earlier this month, biomedical company AbbVie bought Cerevel Therapeutics, which develops drugs to treat psychiatric and neurological disorders, including schizophrenia and Parkinson's disease, for about $8.7 billion.
Karuna's big bet against schizophrenia is the drug KarXT, which the Food and Drug Administration has accepted for review. The company said it hoped to begin marketing the drug in September 2024, pending regulatory approval.
“We expect KarXT to enhance our growth through the late 2020s and into the next decade,” Christopher Boerner, CEO of Bristol Myers Squibb, said in a statement.
The boards of directors of both companies approved the agreement unanimously. Bristol Myers Squibb shares rose 2.5 percent in early trading, while Karuna shares rose nearly 50 percent.
Other Bristol schizophrenia medications include the medication Abilify. In recent years, it has also doubled down on developing cancer drugs, and to that end acquired Celgene, a maker of the blockbuster cancer drugs Thalomid and Revlimid, for $74 billion in 2019.
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